Surprise: Big Telecom Ripped Off A Broadband Subsidy Program For Low Income Americans
from the you-knew-I-was-a-snake-when-you-picked-me-up dept
Early in the pandemic, the FCC launched the Emergency Broadband Benefit (EBB program), which gives low income Americans a $50 discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to users — if they qualified.
But (and I’m sure this will be a surprise to readers), big ISPs erected cumbersome barriers to actually getting the service, or worse, actively exploited the sign up process to force struggling low-income applicants on to more expensive plans once the initial contract ended. Very on brand.
The EBB was renamed the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout to the general public was dropped to $30 a month). And, once again, not at all surprisingly, the FCC recently discovered that “dozens” of U.S. broadband providers were ripping the program off to the tune of millions of dollars across Alabama, Ohio, Oklahoma and Texas.
Now the Washington Post has published an even larger investigation into the whole thing, documenting even greater abuse of the program by US telecom companies. The Post notes how companies like T-Mobile’s Assurance Wireless, for example, exploited the program to convince older folks to sign up for services they didn’t even need. Other ISPs attached weird demands to the program:
Telecom giants soon subjected their customers to a patchwork of inconsistent speeds and price points. AT&T, for example, told some subscribers with premium service — ultrafast fiber connections with download speeds up to one gigabit per second — that they could receive the subsidy only if they changed to service that was one-third as fast with possible monthly data caps, according to complaints filed with the FCC.
Congress and the FCC are “investigating” the problems. Keep in mind, the same telecom industry ripping off a program for low Americans has been waging a character assassination campaign against popular FCC nominee Gigi Sohn, gridlocking her confirmation process and keeping the FCC without a voting majority needed to hold telecoms accountable for anything (the whole point).
None of this is to say the program still hasn’t helped a lot of Americans struggling to make ends meet. More than 14 million U.S. households have enrolled in the benefit program, though that’s only a quarter of the estimated 49 million Americans who actually qualify for it. And there are some concerns that while the program was advertised as a “permanent” fix, the money is going to run out in a few years, leaving a lot of these users on broadband tiers they can’t afford.
Of course, if you step back a little bit, you realize that the program basically just gives taxpayer money to telecom giants with a long history of subsidy abuse, hoping some of it winds up with those in need. You’re basically just giving money to the same monopolies that caused high prices in the first place, to temporarily give relief to people the monopolies are ripping off. You can see how issues could arise.
If U.S. policymakers really wanted to fix U.S. broadband, they’d specifically take aim at the regional monopolies at the heart of the problem. They’d take meaningful aim at their very long history of subsidy fraud. They’d fixate relentlessly on holding monopolies accountable and driving competitors of every stripe — including municipal broadband and cooperatives — into their regional fiefdoms to challenge them.
We never really do that because not only are telecom giants like AT&T very politically powerful, they’re effectively grafted to our intelligence gathering and first responder networks, effectively making them a part of the same government that’s supposed to hold them accountable.
Instead what you get is a lot of chatter about how much we care about the “digital divide,” a lot of band-aid programs that don’t solve the real underlying issue (monopolization and the corruption that protects it), and billions thrown at telecom monopolies with a forty year history of subsidy fraud. Really changing this dynamic requires disrupting telecom monopolization (see our recent paper on this very subject), something U.S. policymakers (with the occasional rare exception) just aren’t interested in.
Filed Under: Affordable Connectivity Program, broadband, digital divide, ebb, emergency broadband benefit, fcc, fraud, high speed internet, telecom
Companies: at&t, t-mobile
Comments on “Surprise: Big Telecom Ripped Off A Broadband Subsidy Program For Low Income Americans”
To say it in a new way: band-aid’s only help when they are applied to the wound. We seem to like (mostly) ignoring the wounds, and putting band-aids on healthy skin instead.
Its hard to tell but this is my shocked face.
Its just happened so much that I now always look like this.
I’m constantly amused how the US govt spends shitloads of money financing stuff for poorer people by giving money to private entities that inevitably end up distributing a whole lot of said money to shareholders while not actually serving the targets of these grants.
There’s some measures like, you know, having state owned companies whose primary objective is to serve unprofitable areas and helping regulating prices (as in, not letting private ones charge whatever value or shady fees they want because they provide alternative) that would prevent such fuckery while reducing the overall costs because people would pay for the service, even if not the full price. This would also help a lot to straighten the completely dysfunctional health care and real estate sectors in the US.
This is what a real left (inexistent in the US except maybe for Bernie Sanders and a few people with very limited reach) would try to implement and this is what actually solves people problems, the rest is just rhetoric.
no surprise
just another government-failure among thousands — that’s why nobody is surprised
real issue is why do people still maintain such deep overall faith in government bureaucrat regulators and politicians
Re: wrong takeaway
If that’s your takeaway from this, I think you’ve gotten the wrong idea.
This broadband subsidy program is a failure because it’s been captured by the broadband monopolies (AT&T, Comcast, Verizon) whereas locally in places like Chattanooga, TN there are Government-run Broadband success stories because the monopolies actually have to compete with a service that doesn’t have a profit motive nor is captured by the same for-profit broadband monopolies.
Capture by private interests is the problem here, not government programs.
Re: Re:
“Capture” is absolutely a huge FAILURE of government/regulators
are these sophisticated, well paid FCC BUREAUCRATS helpless to resist some mysterious mind-control from private corporations
no, he FCC slugs have the same personal greed and self interest motives as the people they regulate — so they naturally cooperate towards those personal objectives.
it is human nature
nothing changed here then! the bigger tradjedy is that those in charge of the program, those responsible for ensuring the program was exicuted correctly and the ones needing the help, as usual, did fuck all to stop it from happening, to claw the funding back or even more importantly, charged those responsible and dragged them into court as well as naming and shaming them in the media!!
Re:
Naming doesn’t work because they have no shame.
Opening a pen colony in Tuktuyaktuk with extended stays for all involved would go a long way towards cleaning up the industry and injection of much needed employment in that isolated community.
Note, repurposing one of the older mines would be a cost saver and prevent guests from being eaten by a Polar Bear. We need to protect those bears afterall.
Re: Re:
But Tuktoyaktuk is in Canada, not the US.
There is a solution
The only way the US is going to solve the digital divide is for the government to do it itself.
First there’s the reality of false notions.
The digitall divide has little to do with the poor in urban populations. And funding tends to target such populations with 10-25Mbps connections. Which is 10-25Mbps faster than 90-some percent of the country receives.
The vast expanse of rural America is generally on sub-10-megabit connections. Be it dialup or satellite.
Second is a legitimate speed issue in urban populations. While suburban monopolies have created artificial pricing, urban duopolies have set rebounding rates. Parity is reality.
Competition is not the solution. One needs only look at Chicago regional with 6 major options to see competitive markets don’t compete. Pricing is nearly the same with all companies.
The solution is the same as with electric and water. Congress needs to set up and pay for every-door internet. Itself. Hiring non-telco-employed techs and construction to build out a full government network to every property in the country.
Telcos, then, would be forced to compete not in price but services. Much as they do with the artificial prices today.
-> but against a public funded system at a much lower cost.